Inside Asian Gaming

inside asian gaming September 2015 54 Constance Hsu General Manager Altira Macau Beyond City of Dreams , Melco Crown Entertainment’s other operations in Macau—the VIP-centric Altira Macau and the Mocha Clubs chain of slot parlors—are in decline. But that’s down more to marketplace dynamics than the abilities of Constance Hsu, who was appointed to head the former in December 2013, after having led the latter since 2008. Net revenue at Altira Macau was $143.9 million in Q2 2015, down 21% from the year-ago quarter. Although Altira actually managed to outperform the overall market in the quarter, with citywide gaming revenue off 37%, the property had already been in serious decline well before the market’s current travails. Altira suffers from an isolated location on Taipa, occupying a no-man’s-land of sorts between the peninsula gaming hub consisting of MGM Macau, StarWorld, Wynn Macau and Grand Lisboa, and the Cotai resort district where The Venetian, Galaxy Macau and City of Dreams lie. Altira is still in the black, but its profitability has been declining steeply. It generated adjusted EBITDA of $6.5 million in the second quarter, a far cry from the $15.6 million in Q2 2014. Over at Mocha Clubs, meanwhile, net revenue was $33.2 million in the second quarter, down 9% year on year. That’s a creditable performance, though, considering citywide slot revenue was down 18% in the quarter, a testament to Mocha’s greater focus on locals play and its lower reliance on the VIP players who frequent the city’s casinos. There were an average of approximately 1,200 machines in operation across Mocha’s venues in the quarter, implying net win per machine per day of around $307. Mocha Clubs generated $7.1 million of adjusted EBITDA in Q2 2015, versus $8.6 million in the year-ago period. Mocha Clubs has had to scale back its operation from around 2,000 machines in operation two years ago in line with government regulations forcing slot parlors out of residential nor are there any hurdles he cannot overcome.” The compliment perhaps stems partly from gratitude for the profits Mr Ho derived from his Do Son casino in Vietnam, made possible by a casino license Mr Yeung had sold him. According to Albert Yeung’s official biography, published in 2012, Mr Yeung had acquired the license in 1993 but chose not to pursue it after being told “It’s not time yet” by a long-trusted feng shui master, leading him to hawk it immediately to Mr Ho. Do Son went on to record a decade of profits but has since slipped into the red. The time for Mr Yeung to develop his own casino came in 1995, after he joined a delegation of Hong Kong business people visiting North Korea at a time when Pyongyang was seeking to develop its Rason economic zone bordering China and Russia. The Emperor Resort & Casino in Rason opened in 1999 and mostly serves Chinese players making the hour’s drive across the border. Mr Yeung has been dogged by controversy, too, including allegations of involvement in organized crime and graft, which he has repeatedly denied. Mr Yeung is reported to have close ties with some of Beijing’s top officials and Hong Kong’s property tycoons. As he said in his biography: “Li Ka Shing, Cheng Yu Tung and [Stanley] Ho Hung Sun all attach great importance to our friendship. This proves that I am not really bad.” neighborhoods. The fact that the chain of coffee shop-style slot parlors has managed to soldier on regardless is a testament to the yeoman job Ms Hsu did in positioning the operation to compete in a rapidly developing market prior to her departure. Ms Hsu had been with Mocha since it began in 2003, starting out as a financial controller and rising through management ranks quickly to become chief administrative officer. There, she oversaw finance, treasury, audit, legal compliance, procurement and human resources. In 2008, she was named president of Mocha, becoming one of only a handful of women to rise to the executive ranks in Macau’s gaming industry. Market dynamics are working against Ms Hsu at Altira, with the property set to become even more locationally disadvantaged as further megaresorts open on Cotai. Still, her posting is clearly a vote of confidence from Melco Crown in her track record of instilling in an operation the necessary focus on customer service and familiarity with local preferences to stand firm in the face of adversity.